When ordering a new business jet from the factory, buyers are typically required to make a series of pre-delivery payments (PDPs) over the production period - which can span 12–36 months for popular types. PDP finance allows you to draw on a credit facility to fund these instalments as they fall due, with the facility converting to a conventional aircraft loan on delivery.
What are pre-delivery payments?
PDPs are instalment payments made to the manufacturer during production, typically structured as a percentage of the purchase price payable at contract signing and at defined production milestones. For a £15m jet, total PDPs might range from £3m to £7.5m before delivery.
How PDP finance works
A lender advances funds against the PDP instalments as they fall due. Security is typically the purchase contract itself and the manufacturer's PDP refund guarantee (most major OEMs provide these). On delivery, the PDP facility is rolled into a conventional aircraft loan secured against the delivered aircraft.
Lenders offering PDP finance
PDP finance is offered by a small number of specialist aviation lenders, primarily Global Jet Capital and a small group of international aviation finance banks. UK clearing banks rarely offer standalone PDP facilities.
PDP refund guarantees
Most major manufacturers (Gulfstream, Bombardier, Dassault, Cessna/Textron, Embraer) provide PDP refund guarantees - a commitment to return PDPs paid if the buyer exercises their right to cancel. These guarantees are important security for the PDP lender.